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Internet Financial Reporting, Information Asymmetry and Family Ownership
Last modified: 2017-12-22
Abstract
The practice of disclosing both financial and non financial information through company’s website is simply known as Internet Financial Reporting. In 2015, Financial Service Authority (OJK) enacted new rule that mandated every listed companies in Indonesia Stock Exchange to have website and disclose financial information in their website. However, the IFR practice in Indonesia is still inconclusive since it was not customized under a certain standard yet, creating information asymmetry. This study was conducted to provide an empirical evidence of the effects of Internet Financial Reporting (IFR) on information asymmetry in Indonesia. The specific ownership structure in Indonesian companies, shown by the domination of family ownership raise an interesting question whether the family ownership might influence the IFR disclosure level. This study investigates whether internet financial reporting may reduce the information asymmetry and whether family ownership might moderates the negative relations between IFR and information asymmetry. Total of 91 manufacturing companies listed in Indonesia Capital Market in year 2016 were selected as samples. Data was collected from annual report, and Datastream and Eikon database. The results shows internet financial reporting has negative significant effect on information asymmetry. However, the family ownership was not proofed able to moderate the negative relation between IFR and information asymmetry.
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